How To Save Tax if You’re Over 50

People over 50, especially over 65, are eligible for further tax savings. Older Americans are eligible for a larger standard deduction and can earn more before they need to file a tax return. Workers over 50 with retirement and health savings accounts can defer taxes on large sums of money. Curious to know more? Here are some tax-saving strategies to help you save money as you age.

Increased Standard Deduction for Older People

If you or your spouse are 65 or older, you’re eligible for a bigger standard deduction, provided you don’t itemize your tax deductions.

The standard deduction for people over 65 who file as individuals is $1,750 more than that for younger people. If one spouse is 65 or older, the standard deduction for married couples increases by $1,400.

If both spouses are at least 65 years old, the increase is $2,800. Also, you can be eligible for a bigger standard deduction if either you or your spouse is blind.

Property Tax Breaks

Property tax laws differ between states and local governments. In some places, people over a certain age and earning less than a specified amount are eligible for special exemptions.

For example, in Texas, homeowners aged 65 and older get a $10,000 homestead exemption for school district taxes. This is in addition to the exemption for homeowners of all ages. Look at your area’s property tax eligibility rules to see if you qualify. You might need to complete additional tax forms or fill out an application before applying for such property exemptions.

Higher Tax-Filing Limit

People 65 and older can earn a gross income of up to $14,700 before they must file a tax return. This is $1,750 more than younger workers. Senior workers are permitted to earn more than younger workers without having to file a tax return.

As opposed to $25,900 for younger couples, the tax-filing threshold is $28,700 for couples 65 or older and $27,300 if only one spouse is over 65.

Those not meeting the filing requirement can file a tax return to be eligible for tax credits or a refund of withheld income tax.

Tax Credit for Seniors

Senior spouses aged 65 and older can apply for tax credits if they have a low income. Retirees who qualify can also reduce their tax liability by taking the credit.